IMPORTANT POINT
– Counsel appearing for a party is fully competent to put his signature to terms of any compromise upon which a decree can be passed.

1. Brief facts of the case leading to the filing of the instant writ petition are that Mohd Rashid and others filed a Claim Petition under Sections 166 and 140 of the Motor Vehicles Act on 22.07.2003 before MACT Poonch. An ex- parte award dated 27.12.2006 was passed in favour of the claimant respondents and against the Insurance Company directing it to pay an amount of Rs.4,68,000/- besides a sum of Rs.20,000/- on account of loss of consortium and Rs.6000/- on account of funeral expenses along with interest @ 6%. Application dated 28.07.2007 was filed by the Insurance Company for setting aside of the ex parte award. During the pendency of the said application, the matter was listed before the Lok Adalat.

2. Learned counsel for the petitioner-Insurance Company contends that as per practice, a claim is taken before the Lok Adalat on the written request of the Insurance Company after due investigation and on reaching a conclusion that the insured has not committed any violation of the terms and conditions of the Policy. Learned counsel for the petitioner further contended that the petitioner-Insurance Company had not authorized the counsel for getting the matter listed before the Lok Adalat for entering into a settlement and the counsel engaged by the Insurance Company, on his own without any permission from the Insurance Company made a false statement before the Court that he had been instructed by the Insurance Company to negotiate the claim petition. Learned counsel for the petitioner-Insurance Company has referred to Clause-3 of the Vakaltanama given by the petitioner Insurance Company in favour of repsondent No.12 i.e Advocate engaged by it before the MACT as per which a claim could be compromised by respondent No.12 only with the prior approval of the Insurance Company. Relevant extract of Clause 3 of the Vakalatnama is reproduced hereunder:

“To withdraw or compromise with the prior approval of the Company, the said case or submit to arbitration and differences or dispute that shall arise touching on any manner relating to the said case”

3. Learned counsel for the petitioner-Insurance Company further referred to communication addressed by the Insurance Company to respondent No.12 dated 25.05.2007 requesting him to appear before the Court on 28.05.2007 for hearing and setting aside exparte award against the Insurance Company and to inform it accordingly and also enclosing Power of Attorney duly signed in his favour for appearance on behalf of the Insurance Company and also requesting him to be in touch with the Company and to inform it about the latest status of the case. Copy of the aforementioned communication dated 25.05.2007 as also Power of Attorney in favour of respondent No.12 is taken on record. Copy thereof handed over to learned counsel for respondent No.12.

4. Learned counsel for the petitioner-Insurance Company contended that in the circumstances, the counsel engaged by the Insurance Company before the MACT Poonch had on his own without any authority admitted that the Insurance Company was ready to pay the awarded amount of Rs.4,94,000/- along with interest @ 6% per annum to the claimant from the date of presentation of the claim petition, whereas the statement so made by learned counsel for the Insurance Company was false and incorrect and the Lok Adalat set aside the ex parte award dated 27.12.2006 and disposed the claim in the light of statement made by the counsel for the Insurance Company. Learned Counsel for the petitioner contended that the counsel engaged by the Insurance Company before the MACT Poonch did not inform of the proceedings taken out by the Lok Adalat and the Insurance Company came to know about the same only on 15.09.2008 on receiving a copy of the award from the counsel for the claimant i.e. Shri Raja M.A.Khan from Poonch where - after correspondence was made with respondent No. 12 for a certified copy of the award as to proceed in the matter as the copy sent by the counsel f